How do I declare bankruptcy in Canada?

_{declare bankruptcy in Canada, How to declare bankruptcy in Canada, Ontario}

Kick off your bankruptcy journey by connecting with a Licensed Insolvency Trustee (LIT) for a free, private chat about your financial situation. They’ll help decide if bankruptcy or a consumer proposal suits you better. With documents signed, your trustee halts creditor actions, manages asset sales, and guides you through monthly payments and financial education. First-time bankruptcies clear in 9-21 months. Remember, bankruptcy isn’t your only option. Be cautious—some trustees might not be trustworthy. Because lenders and creditors pay trustees, they aren’t focused on helping Canadians in debt. Some may double bill you or add extra fees. Stay informed! Reach out by phone, text, or live chat with your questions.

Show Table of Contents

_{Start your bankruptcy process with a Licensed Insolvency Trustee.}

Declare Bankruptcy In Canada Question

How do I declare bankruptcy in Canada? I’m really stressed about my debts and think bankruptcy might be my only way out. I need to know exactly how to declare bankruptcy in Canada.

From: Anonymous Question
Location: Brantford, Ontario (ON)
Category: personal bankruptcy

Declare Bankruptcy In Canada Answer

Connect with a Licensed Insolvency Trustee. Kick off the process by reaching out to a government-licensed pro who handles bankruptcy matters. LITs offer free, private chats where they’ll assess your income, assets, debts, and expenses to help figure out if bankruptcy is your best bet or if a consumer proposal might work better. Get your bankruptcy paperwork in order. Once all the documents are signed, your trustee files the necessary forms, putting a pause on any creditor actions against you. Handle and sell assets. Your LIT will manage the sale of any non-exempt assets following BIA rules. Monthly payments and financial education. If needed, you’ll make monthly payments based on extra income and attend mandatory money management sessions. Relief from bankruptcy. Typically, first-time bankruptcies wrap up in 9 to 21 months, clearing out remaining debts. What happens after bankruptcy. While bankruptcy lingers on your credit report for 6-7 years, you can start improving your credit right away.

Remember, bankruptcy isn’t your only choice, so explore options with your LIT. And since not all trustees are equal, be picky. Licensed Insolvency Trustees are funded by lenders and creditors, not by Canadians facing debt issues. They can also charge extra fees or bill you twice. Stay aware! Contact us through phone, text, or live chat for support.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

To declare bankruptcy in Canada, follow these steps:

1. Confirm your eligibility: You must be insolvent, meaning you owe at least $1,000 and cannot pay your debts as they come due (Bankruptcy and Insolvency Act, RSC 1985, c 1, s 2).

2. Choose a Licensed Insolvency Trustee (LIT): Your bankruptcy must be administered by a licensed trustee who will help you through the process (Bankruptcy and Insolvency Act, RSC 1985, c 1, s 9).

3. Provide necessary documentation: Gather financial information including your debts, income, assets, and living expenses to provide to your LIT.

4. File a bankruptcy application: Your trustee will file a Notice of Bankruptcy with the Office of the Superintendent of Bankruptcy (OSB) and notify your creditors (Bankruptcy and Insolvency Act, RSC 1985, c 1, s 49).

5. Attend required meetings: You may need to attend a meeting of creditors and also take part in a financial counseling session (REGULATIONS - C.R.C., c. 369, s 25).

6. Complete and fulfill your bankruptcy obligations: This includes making any required payments to your trustee and adhering to any conditions set forth in your bankruptcy.

7. Obtain your discharge: After fulfilling your obligations, your LIT will file for your discharge from bankruptcy, which releases you from your debts (Bankruptcy and Insolvency Act, RSC 1985, c 1, s 170).

For more details, refer to the Bankruptcy and Insolvency Act and the relevant regulations.

From: OSB Helper

Related Questions to How To Declare Bankruptcy In Canada

Here are the top 5 most frequently asked questions related to declaring bankruptcy in Canada, formatted in markdown:

1. Who is eligible to file for bankruptcy?

You must owe at least $1,000 and be unable to pay your debts as they become due[2].

2. How long does personal bankruptcy last?

Bankruptcy typically lasts for nine months for first-time bankruptcies, but can extend to 21 months if you have surplus income, and longer for subsequent bankruptcies[2].

3. What debts can be discharged through personal bankruptcy?

Most unsecured debts, such as credit card debt, personal loans, and certain government taxes, can be discharged, but student loans and child/spousal support are not dischargeable[2][5].

4. Do I still have to pay child/spousal support if I declare bankruptcy?

Yes, individuals owing child or spousal support are still responsible for making these payments[2].

5. What are the alternatives to personal bankruptcy?

Alternatives include Consumer Proposals and informal debt settlements, which allow negotiation with creditors to manage debts outside the formal bankruptcy process[2].

If you have a question about debt see our debt questions or ask your own debt related question.

References

_{Table of article references}